Fail

When Tom Kioussis got the listing for a crappy little house on a fat lot in a part of Toronto once reserved for cheap carpet stores and Polish immigrants, he had a big idea. Price it so low there’d be not only a bidding war, but free publicity for him, lots more business and the perception of a stupid hot market.

In fact, back in the real estate office they laughed, and started betting on how many sucker offers would materialize. As Kioussis bragged to the Toronto Star a couple of days ago, “I bet 25-plus bids. I thought if it didn’t break 20, I wasn’t doing my job.”

Thirty-one offers later, the house ridiculously listed at $379,900 sold for $570,000, which was (of course) market value. Reported the Star: “Toronto homebuyers, brace yourself for a hot spring. The short supply of properties — coupled with low interest rates and continuing high demand — played out with a passion this week in a 31-person bidding war in Mimico that has realtors talking.”

So here’s a nice little example of media manipulation, apparently easier now than it’s ever been. When reporters stop chasing facts and start writing spin, they cease being reporters. This is exactly why the MSM is now as respected as infomercials for Pet Potty and No!No! Hair Removal (Bikini edition).

As for Mr. Kioussis, well, he did the job for his clients and was paid well for it. He made the news. He’s made it to this blog. And he gave every homeowner in Mimico wet dreams about untaxed capital gains.

Not a day later Star editors outdid themselves. They published a piece, “Why it’s a good time to buy a home,” written by ‘lawyer, author, columnist and speaker’ Mark Weisleder. It ate most of a page, was definitive and authoritative, and ran as editorial copy instead of advertising content. Is there a distinction anymore?

He gave eight reasons readers should ignore historic high prices, economic malaise, unaffordability, greedy vendors, debt overload and property diddlers like Tom Kioussis, and jump right in. I read them all. I’m very pleased Mr. Weisleder is not my lawyer.

Why is it a good time to buy on Planet Weisleder?

First, low mortgage rates. “They can’t get any lower,” he says. Of course, low rates mean danger since the economy is weak. And as rates eventually go up, affordability and house prices go down. So pity those who locked in a great rate only to see their equity vanish.

Canada is appealing, he says, a safe haven in a volatile world. True enough. But we also have one of the most inflated housing markets on earth, and live next to the biggest economy, where real estate costs half. Canada is cool, but not that cool.

Third, he says, this means tons of immigrants, “often wealthy ones. So in my view while the real estate market may level off in some areas of Ontario, it should stay strong in most of the GTA and likely Canada’s other large urban centres as well.” In the absence of any stats to prove this, his view is worthless. The urban myth of foreigners keeping prices up in a market of 6,000,000 people is just that. A myth.

Fourth, we don’t have a lot of mortgage defaults, he says. Over 99% of us make our payments on time. True, and irrelevant. A lawyer should know this. The danger is not a wave of foreclosures but negative equity among all those kiddies we let buy condos and townhomes with 0% or 5% down. Our lax lending and unique Canadian subprimes have all but assured lower values as people who should have never owned homes sell off for whatever they can get.

In Canada, “loans are almost all recourse, meaning if you don’t pay and there is a shortfall, the lender can sue you for the difference,” Weisleder says, so we’re safe from a US-style crash. Another myth. Many US states have recourse loans, just like us. That sure didn’t stop a real estate bloodbath in Florida or Nevada.

Sixth, houses here aren’t really expensive, we’re told. “If you look at median incomes of Canadians against the median cost of homes, this average comes down to around 3.5, which is not dangerous.” Untrue. The ratio of median price to median income for a detached house in Toronto is seven. By global standards that is ‘severely unaffordable.’

As for record levels of debt, Mark asks, “Why is this so bad? At an interest rate of 3 or even 5 per cent, the amount needed to service the debt is manageable.” Well, apart from the fact rates will rise long before most people have paid off a fraction of what they owe, incomes are falling behind inflation and 40% of people can’t pay their monthly bills. Besides, it was at almost exactly this level of consumer debt that the US housing market blew up.

Finally, the US economy will be fine (and us too) because, “in a U.S. presidential election year, politicians will do whatever is necessary to prevent it.” However, exports to the States are already down $30 billion, which is why our unemployment is rising. And does anyone believe a growing protectionist sentiment in the States is good for bungalows in Mimico?

So many words. So many errors. But at least Mr. Weisleder’s consistent. The lawyer makes his living giving courses to real estate agents on ‘generating referrals’ and ‘avoiding legal and disciplinary proceedings’. He also delivers motivational talks on such sexy topics as ‘the perils of not having proper Buyer Representation.’ Man, he brought down the house with that baby at Re/Max’s giant KickStart 2012 event a few weeks ago (below).

But when you can’t trust agents, reporters or lawyers, can the apocalypse be far behind?

Note and clarification: The original post (above) referred to Mark Weisleder, a lawyer, as ‘defrocked’. He replies: “I have been a practising lawyer for the past 28 years and continue to practice in Toronto”. The record stands corrected, and I apologize to Mr. Weisleder for any confusion created over his professional standing. — Garth

202 comments ↓

To quote the commanding general of the 101st airborn division at Bastogne during WW2, “Nuts”.
Canadians are Nuts about real estate and are in defiance of common sense. I will enjoy seeing them learn the hard way.

Here in Australia real estate spruikers say pretty much the same thing and distort the figures in similar ways. My favourite goes something like this:
“Housing is still as affordable as ever. In years past a typical first home buyer was a family with dad and mum in early 20’s with bub and one low income. Now a typical first home buyer is a working professional couple in their 30’s with no kids. Price is still the same multiple of household income”

Thirty-one offers later, the house ridiculously listed at $379,900 sold for $570,000

A few posts ago I had a link to that exact house, see Pic above when I said buldoze it and put up town houses or three singles. and make an easy million, what I want to know is who on here had bids.

Obviouly a builder bought it

This is reality from 1st street to 41st south of lake shore, my hood, bought here last year. Anything here gets scooped up instantly. Long Branch will become beaches west. and prices will sky rocket. No red dots here. Carney needs to spike the over night rate now or prices are going into orbit.

There is house close to mine, not listed on a big lot, no one living there house is empty. atleased 15 people a day drive by and go check it out.

This area rocks and you still have time to buy and double up when toronto and mississaga finish the beach project

The “yield trade” looks quite tired here, with little to no capital appreciation left on the table for several issues.

Using a BMO preferred as an example, (BMO.PR.O), currently yields 5.8%, trading at $27.73 per. Sounds sweet, right? Except that the bank has reserved the right to buy them all back at $25 in a couple years time.

Almost every single preferred bank share out there is now trading above it’s buy-back price. Isn’t there any concern as an investor you’re going to be forced to part with your stock at a loss?

REITs were a great trade in 2011, but every issue worth investing appears to be quite overbought at this stage in the game.

Investors looking for yield are running out of places to park… perhaps best to raise cash at this point and wait for the market to “choke” on the next inevitable global-problem that seems to arise every few months.

Finally, the US economy will be fine (and us too) because, “in a U.S. presidential election year, politicians will do whatever is necessary to prevent it.” However, exports to the States are already down $30 billion, which is why our unemployment is rising. And does anyone believe a growing protectionist sentiment in the States is good for bungalows in Mimico?

Most new people moving to mimico and long branch work downtown in finanace or law, they make good loot. Not dependant on mfg or exports.

If greece goes under then there might be a problem. Bottom line is, in the area you can walk to the go station jump on a train and me at union station in 20 min. You can walk to the bank, the beach, the bars, the groccery store, the pharmacy in like 5 min.

Can you do a post on the wisdom of refinancing in the current environment? I am half-way through a 5-year term, with IRD penalties, but understand that if I do some sort of blend&extend I can take advantage of the <3% 5-year rates going around to lower my fixed rate and lock it in for 5 years (from today). I would think this is advisable, since rates are expected to rise. I'm talking to a mortgage broker tomorrow (Monday) – he's running my numbers to see what the net benefit to me is and assures me that either lower payments or accelerated payoff will be the result due to a lower rate, even with the IRD penalty. Anything else I should watch out for?

I think Toronto residents should take a look at what’s going on in Vancouver. There are a flood of listings coming onto the market this months. Also, condos are being built like crazy. I’ve heard fom many people that developers are not able to find buyers. I can’t confirm this but I’ve noticed that Richmond has been building and planning many many huge projects. If this is the case, there will be a surplus of condos and this could signal price reductions from the developers. Resale condos will not be able to compete with developers and the could cause a major crash for condos. I wouldn’t be surprised if developers slash prices up to 30-40%

Yes, the USDA does not say why global warming is happening. They just say that it is. It is not their job in any event. So where does this leave us? Perhaps we should think for a minute……for a change.

Occum’s Razor would leave suggest that we go with the most obvious conclusion which is that it is man caused. What are the alternatives?

Does it make a difference? No. Even if it is not we know that our behaviour contributes to it. If, for example, this was a weather cycle wouldn’t prudence dictate that we do what we can not to accelerate it. Or try to reverse it.

This is why I moved away from this area in Toronto. $570,000.00 for that ?! Yuck ! I live in a beautiful older heritage home neighbourhood with gorgeous mature trees and I own a home that has a hundred times the cachet than this one. In Toronto it would cost a million dollars but in Sherbrooke, Québec it costs less than half that (and I paid about 25% of this in 2003).

I would rather rule in heaven than serve in hell (and yeah, that’s EXACTLY what I mean).

I cannot believe the van market is still insane. We visited an open house back to last summer at Burnaby south was asked at $900k, yesterday I saw it on a realtor’s website and ask for 1,190k. Just in 6 months, what makes the sellers so crazy? I do believe the historic low rate adds the oil to the fire. Meanwhile, the HAM is another contributor, the easy money they made through real estate back China （500%return in 7 years), none of the stocks can compete that. Currently people are copying the same success in Vancouver. I feel so sick even I bought my property 8 yrs ago. I really hope the bubble will burst ASAP, which serves a lesson to speckers and saves more local working class people.

”Man, he brought down the house with that baby at Re/Max’s giant KickStart 2012 event a few weeks ago (below).”

Kinda reminds me of the “Pyramid Get Rich Quick Scheme”, conferences that swept the country back in the early 70’s. Many unemployed realtors involved in those back then. Remember Koscot and Dare to Be Great? Many young people lost their shirts. Lots of broken marriages. What is happening with RE right now is not going to end well. Lots of young people going to get seriously burned.

Grath,there’s a great site for ordinary people to find out about what homes in local neighbourhoods in the gta sold for without asking a real estate agent , it’s useful for comps and local market trends. The site needs more subscribers,or it will shut down. The link is http://tosold.ca/

Garth…..love your saying who you can’t trust! Of course, your list could include several other occupations, but no sense listing them all on one day:)……not that you haven’t already listed them in other articles. TNL@TB is probably relieved to not be mentioned today:)…….nice of you to give her the day off………keep this blog going Garth, please, we desperately need the truth to be in print! Thanks!

he’s right they cannot get any lower. In the US as housing sales declined, the mortgage rates were lowered. This lowering had the effect of cushioning the decline in sales. In Canada we lowered our interest rates to match the US but now when Canadian sales decline, we cannot lower our mortgage rates. Ergo no cushion.

the warnings out of the US are authoritative, consistent and they are dire. The signs of a collapse are everywhere. The Toronto Star is destroying its credibility. (I once delivered the Toronto Star, 55¢ a week, 75¢ a week with the Star Weekly Magazine)

soft landing? ain’t no such thing

#31Ozy - Really, anyone is now qualified to advise on RE? on 01.29.12 at 9:42 pm

Is now anyone is qualified to advise on RE? What a shame, all of his arguments are super ridicule.

Word-of-mouth from the office has lead me here and I couldn’t be happier. It seems I have a lot catching up to do, but from I read so far, you should be proud of yourself Mr. Turner. You have made a financial blog that is easy to understand, insightful, helpful and quite amusing as well. I will endeavour to learn more and put into practice what I read here.

Also, I can understand why you may feel discouraged at times to write for an audience reluctant to heed your advice. Courage sir, us snowbirds-of-a-feather must stick together. If ever in doubt, take a nice trip south to Florida to recharge and remind yourself that what you speak of is the truth. I look forward to reading more from you.

Btw, I do rent and am fairly liquid right now too. It’s like this blog was made for me.

Garth, I’m honestly starting to lose faith. A lot of average at best homes throughout the country are listing anywhere from 500K to 1 million. Homes never reached near this mark in the United States before their housing crash. I often explore the web; and people speak how a million dollars is a lot of money and maybe something to retire on, but in this nation 1 million wouldn’t even buy you a crack shack.

It’s getting to the point that even a correction of 50% wouldn’t have any hope of saving my generation. The high real estate prices affect rents, so finding refuge here isn’t exactly an answer either.

Due to my limited life span as a human being, there’s a limit to how long I can realistically put my life on hold to wait this bubble out. I want to actually start enjoying my life and put some of my money to use (sorry Garth, preferred shares are just paper until they’re cashed in for material you can actually use/enjoy), rather than keeping my money on forever hold status.

It’s getting to the point my generation is being locked into a position of a permanent underclass due to Weimar Republic like policies; just to keep the “house for retirement” boomer plan churning.

I may have no choice but to park my money in another country and leave the nation as soon as possible if this keeps up. I don’t see any future here in Canada, especially when the cost of entry is so impossibly high. My fear is that even if the bubble were to collapse; it still wouldn’t be enough. For example, I can’t see our housing going down to the levels of that of the United States in a reasonable amount of time, because our bubble is so far ahead of them.

People flee countries all of the time for various reasons, it sucks being an economic refugee, but what can you do in the face of stealth generational slaughter-feist? I for one I’m tired of paying “my dues” to greedy baby boomers for either their overpriced rent or mortgages because they were lucky to be born ahead of me to “make a claim on the land”. I don’t want to give a single red cent to a Canadian baby boomer; they don’t deserve it, so in the end the only way to put a sanction of the generational wealth transfer is to move out. . .

Weisleder is a regular columnist for The Star (in the “Moneyville” section) and is a consistent and unabashed real-estate pumper. Not so sure about the “defrocked lawyer” bit, but his bio seems to indicate that he left the practice of law to go into sales / marketing some years ago.

Mark Weisleder’s eight points set off my alarm bells. It reminds me of a pivotal event in my life in 2007. I held shares in a private company and a private equity firm was taking a position, providing liquidity for shareholders if they wanted it.

Most shareholders were saying the same kind of things Weisleder is saying… “Sales are way up! Profits are beating expectations! Projections have never been rosier! The private equity offer has come in way higher than expected! The economy is strong! Everything is perfect! WHY SELL NOW? Now is the time to buy!”

It took about a week on pondering the situation until the light bulb suddenly came on over my head. (I was driving my car at the time and remember exactly where I was when I saw the light.) I realized, “Everything IS perfect. So there is NOTHING more that can go right. There is only room for things to go wrong, now. Sell.”

I cashed out and, in 2008, the share price (and liquidity) of the company plunged.

#18
The inconvenient truth is “global warming “has flattened off over the last 10 yes 10 years but you won’t find that in the MSM much.
Yes global average temperature has flatlined over the last decade.
The truth is our planet has spent much of it’s time in ice ages and we are due for an other one.A little bit of CO2 won’t change a thing.

We are witnessing the death of the middle class. Those who are rich are too wise to buy at such inflated prices. Those who are poor just can’t. The middle class will soon join the latter when reality hits. This is history in the making!

You should pause that video at 0:57 and read the powerpoint slide… It goes:
“Ultimate Objective… Satisfaction… and satisfaction is a perception
– of the parties to the transaction
– of the negociators in the transaction
– of the peripheral professionals associated with the transaction
– may have nothing to do with reality
– has no correlation to whether the parties had a ‘good’ deal
”

“Changes in both the orbit and tilt of the Earth do indeed indicate that the Earth should be cooling. However, two reasons explain why an ice age is unlikely:

These two factors, orbit and tilt, are weak and are not acting within the same timescale – they are out of phase by about 10,000 years. This means that their combined effect would probably be too weak to trigger an ice age. You have to go back 430,000 years to find an interglacial with similar conditions, and this interglacial lasted about 30,000 years.
The warming effect from CO2 and other greenhouse gases is greater than the cooling effect expected from natural factors. Without human interference, the Earth’s orbit and tilt, a slight decline in solar output since the 1950s and volcanic activity would have led to global cooling. Yet global temperatures are definitely on the rise.”

The above statement should probably be qualified in that although global temperatures are rising, they aren’t rising everywhere, and in some areas they are dipping. This reflects the term “Climate Change”.

Sounds like the same crap we heard a few years ago from some expert? Well strangely that crap made people a lot of tax free income when they sold this year. Lets get down to business. Are we now expecting RE prices to continue going up or not?? Few weeks ago we were almost certain we were in for a correction. If we have a hot spring market.. Ooo..that’s going to burn.

“The endgame in times past was to write down bad debts. That meant losses for banks and investors. But today’s debt overhead is being kept in place – shifting bad loans off bank balance sheets to become public debts owed by taxpayers to save banks and their creditors from loss. Governments have given banks newly minted bonds or central bank credit in exchange for junk mortgages and bad gambles – without re-structuring the financial system to create a more stable, less debt-ridden economy. The pretense is that these bailouts will enable banks to lend enough to revive the economy by enough to pay its debts.

Seeing the handwriting on the wall, bankers are taking as much bailout money as they can get, and running, using the money to buy as much tangible property and ownership rights as they can while their lobbyists keep the public subsidy faucet running.

The pretense is that debt-strapped economies can resume business-as-usual growth by borrowing their way out of debt. But a quarter of U.S. real estate already is in negative equity – worth less than the mortgages attached to it – and the property market is still shrinking, so banks are not lending except with public Federal Housing Administration guarantees to cover whatever losses they may suffer. In any event, it already is mathematically impossible to carry today’s debt overhead without imposing austerity, debt deflation and depression. ”

The power of interest rates is everything. It’s the reason why junk homes are listed for half a million dollars. It’s all about the monthly mortgage payment and the average person’s ability to pay it.
So which is better – buying a house (zero down) for $500,000 with a 3% mortgage? Or that same house for $310,000 house at 8%. Turns out the monthly payment is exactly the same – $2366. Shows you what will happen to home prices when rates normalize.
For all you 20-somethings, 8% is historically an average rate that may people have had at some time or another in their home ownership.
Personally I’ll take the second scenario. The up side to rates going higher is less, with a possibilty of easing lower. And there’s a better chance for capitol appreciation on the house since it was reasonable to begin with. A bloated, over-priced home these days is a bad risk – even at low interest rates.

The bubble has topped. These things are mere outliers and are being presented as medians in the media. I have an uneasy feeling something criminal in nature is now playing itself out across the country (I said this last year but there is clear evidence the market has topped now). Is there no possible way to bring a class action lawsuit against the MSM/RE cartel/Banks/Government for colluding to perpetuate one of the greatest economic disasters yet to fully unfold in Canada’s short history? There was one telling remark cited by Garth regarding the Lawyers statement with respect to affordability. The lawyer was reported to have stated something to the effect that an average family income in the past (maybe 50 years ago in my estimation) was composed of a single low income brought home by the man of the house to support a family with kids while present family income is composed of two incomes brought home by childless couples. Perhaps this partially explains the lack of concern for our children’s collective future (mine in particular as part of the great unwashed). Perhaps more family based representation in parliment is in order or is that not PC presently. If such is the case then maybe a party representing the children of our nation.

We don’t have real, market-set and market-related interest rates. We have super-cheap “money” provided by the BoC and the bond market.

Bond “investors” will keep buying government debt in perpetuity: they have little choice, needing cash flow. They are not really free to “invest” or to speculate.

The BoC is, of course, built on the false premise that the economy is not a naturally-developed entity but something that can be managed and shaped by government action. They’ll eventually learn this, but not yet.

It’s the closest thing possible to a money-printing perpetual motion machine. But what will give way is the REAL economy.

Aww Garth, that video you posted of the ReMax conference just made me nauseous. These people think the party will last forever, it was like watching some sort of get rich quick cult infomercial on late night tv. Is it bad to want the housing market to tank just to watch these arrogant realtors eat some humble pie? Probably… Only problem is that a lot of innocent people will lose their shirts as well as they watch the majority of their retirement plan go down the drain. :(

Thanks for your words of caution, we need people like you in these days of excess and greed.

I think Toronto residents should take a look at what’s going on in Vancouver. There are a flood of listings coming onto the market this months. Also, condos are being built like crazy. I’ve heard fom many people that developers are not able to find buyers. I can’t confirm this but I’ve noticed that Richmond has been building and planning many many huge projects. If this is the case, there will be a surplus of condos and this could signal price reductions from the developers. Resale condos will not be able to compete with developers and the could cause a major crash for condos. I wouldn’t be surprised if developers slash prices up to 30-40%
====================================

Well said.

Lots of new product in Richmond is UNsold.

Yet, they are still building Hi rises…..it is totally insane.

It is OFFSHORE $$$….its is beyond obvious, hence various forms of passport buying tomoney laundering.

Drive around Richmond at night…..on average 75% of most Hi Rise condos are dark.

Yawn… you’re putting your life on hold because… you can’t afford to buy a house? Welcome to the real world, I guess, where most can’t afford to buy everything they’d like to. Is your life on hold because you drive a 10 year old Corolla too? Your posts win on the fail scale every time, handily beating out the firsters, DA and Smoking Man.

“I don’t want to give a single red cent to a Canadian baby boomer; they don’t deserve it, so in the end the only way to put a sanction of the generational wealth transfer is to move out. . .”
——————-

“You need not contribute squat on my behalf young fella. I live on my own resources carefully managed over a lifetime. But I am going to miss you.”

Really?

Is that because your generation has lived beyond your means for 30 years and racked up unsustainable debt and passed it onto people like him?

Face it, baby boomers will forever be remembered as a pock on North American generations. A greedy live for today attitude that they are clinging too even now with their gnarled fingers and non-existant libido’s.

Unfortunately, every day that poster is giving a lot of “red cents” on your behalf you bitter old codger.

“Occam’s Razor would leave suggest that we go with the most obvious conclusion which is that it is man caused.”
————————-
The planet has heated and cooled for millennia,
without mans presence.

Only our arrogance allows us to believe we’re so relevant, as to have such an impact on the planet.
If you feel strong action is required, may I suggest contributing 10% of your net to the Church of Global Warming. I bet it’s tax deductable.

first, DonDWest, despite the people slagging you and the fact that I’m a boomer, keep up the fight brother. You make some great points and as a renting boomer I feel your pain. My simple message would be to refrain from painting people using a generational brush; yeah, lots of my buddies are doing fine but only if they’ve been in RE for a couple of decades…..the rest are kind of f*&ked

Also, did anyone watch that video? How freaky was that. what a bunch of scary swill.

Can’t we figure out a way to eliminate all the RE agents in one fell swoop?

I can see a series of delay tactics being deployed in an attempt to put off manifestation of the more dire consequences of this bubble unit after the conservatives lose the next election so the very same conservatives can try to blame the party in power at the time for the economic catastrophy then apparent.

Canada is such a s??t country. It’s a land of slavery and suffering. What is so good about this stupid cold country? Be a slave for a home because mark the talk carney who refuses to rise interest rates. The only options is to buy and hope for the best and worse comes to worse you go bankrupt and leave this stupid s??t country in economic ruin. Last choice is leave this s??t country for a better life. Thanks anti Canadian CONservatives and useless Mark the talk Carney. Canada SUCKS

It would be prudent for the Liberals to run a lame duck again if the bubble has been sustained until the next election (a highly unlikely and destrutive stituation). Likely in the guise of a soft landing (whatever that means exactly). Wake up everyone. Read these comments. Most do not give a care for one another in the least. We all cannot be stock, RE, bonds winners. In fact most are not if truth be told but we all must have shelter from our Canadian winters, food on the table, medical care when we are sick, quality education for our children and a future to pass on to these same children. We must work hard and smart to bring this about. Pipe dreams are for crack smokers. I do not really care about most others if truth be told but my children cannot make it alone and I cannot live long enough to see them into their old age (never mind their children). The ground has been profoundly and obscenely shifted in this past decade. We can change absolutely everthing with a few simple laws (no need to throw the baby out with the bath water).

I heard on the National news just the other night that were going to break a record on European Immigration. I wish I could find an article on it, anyways it’s all about the feds keeping the bubble from bursting.

#71Ozy - Can one sue the lawyer if buys now and loose 20% 1 year later? on 01.30.12 at 12:59 am

Garth, can one sue such lawyer (media pumper) if she or he buys now (at current insane proces) and loose 20% 1 year later? or the Agent? Or both?

You know, buying a tear-down today vs a new house 1 year later; or buying a semi today vs a detached a year ahead, would make me want to sue.

Agree on the comparison to a Scientology convention. Drink the kool aid, and any bubble talk will get you 30 days in solitary confinement.

Reminds me of the political journalism scene in the BC government. The CBC reporter for the Leg is married to Christy Clark’s right hand media person and even the CBC Ombudsman rules there is a potential conflict of interest but CBC tells us all to shut up and mind our own business. Even the reporters from all the competing outlets like Global, The Sun etc all support this conflict of interest though it is against journalism ethics and CBC policy. The media in our country has gone for a complete shit. Thank God for blogs like Garth’s and Alex Tsakumis’s.

I lost all faith in “agents, reporters or lawyers” a long time ago, but well after “government.” I figured out early on that the powers-that-be were not going to look after my best interests, and acted accordingly. Now, thankfully, we are 100% liquid, balanced, diversified (due in no small part to an excellent financial adviser, fortunate timing, luck, and not least, this blog).

GARTH; if you are correct and rates are at a low point and will soon begin to rise then you are correct and home buyers are buying at at time when prices are the highest, but what about if these low-low / ultra-low interest rates will stay with us for another 20 to 40 years time, what then?

Please tell the readers; do you believe that in 10 years time from now interest rates will be at the same level as they are now, or perhaps even lower?

( Remember; Japan had low rates for 15 years, that didn’t stop their market from continuing to fall. )

—-

#33 DonDWest said: (‘I may have no choice but to park my money in another country and leave the nation as soon as possible if this keeps up. I don’t see any future here in Canada, especially when the cost of entry is so impossibly high. ‘)

Yes, exactly!
I TOTALLY AGREE WITH YOU !
And major employers here in Canada are saying the EXACT SAME THING, they are saying that people here cost too much, they cost too much because houses cost too much, so they can go to American and hire people there for half the price here because the cost of living in America is so much less, so they are able to catch high-quality people for less money, that is one of the major reasons why so many large companies are closing down here and moving to the USA.

As for anti-Canadian conservatives while a little harsh one could make the case that Mr Harper is anti Canadian and pro Albertan. He long advocated Alberta take a course that insulates it from influence from Eastern Canada (read the National government in Ottawa). While Mr harper himself is originally from Eastern Canada he left an eastern University prior to completing his studies and completed his studies in a western University. The success attained through his personal fortitude my have been attributed by himself to the percieved better qualities of the western University. While vocal minorities have co-opted national politics for the past 3 or 4 decades it is no reason to lead this great country into financial ruin. Divide and conquer.

Drive around Richmond at night…..on average 75% of most Hi Rise condos are dark.

The warning signs are there for major collapse.

This will not end up well”

If indeed this is all off-shore money, why won’t it end well? So what if the condos are all dark? These foreigners are paying their condo fees, property taxes,etc. They are the ones with money. If locals were buying these condos, then I would be worried about the economy, rise in interest rates, lack of jobs, etc. The ones that launder millions in this country do not worry about such nonsense, only that they can park their money…and they have lots.

Let’s not worry about the bubble bursting. Unless off-shore money loses interest, it will not happen. Housing prices may level off a bit, but surely we will not see a 20% decrease in prices.

As for Ontario I am thinking taking Hydro back from private entities (they have done a horrible job since the privatization) and fast tracking the hydrogen economy would not be entirely bad ideas(oversupply of throrium reactors, government backed and protected fully electric car manufacture with an eye upon eventual foriegn markets for fully Canadian engineered next generation automobiles, cheap energy and jobs provide for a sustained economic stimulus more so than handing out free money to banks and government entities are much more efficient than most private entities in the long and even short run). In truth no country in the world could compete with Canadian made cars manufactured out of Canadian raw materials. While the front end would be steep it is a mere shadow of this bubble. Thats only a few thousand jobs but it is only a tiny part of what should be done. Hey the buzz word is competition, well we should exploit our strength as a resource rich country and dominate every market that we can. Robotics and hard work…by the way 50% of all the industrial robots in the world are in Japan

Infra-structure has proven to be a good place to start a recovery in the past. I would suggest a fibre optic infrastructure that connects the entire country (yes ENTIRE, even the whole of the great white north) right up to the house. The latest nonsense with SOPA (supported whole heartedly by the conservatives, no vision what so ever) and the like clearly underlines the need for Canadian governed top domains as well. As for the horrendous quality of the cellphone network and the obscene rates asked of Canadians, there is another bit of infrastructure that needs to be taken out of the hands of private entities that are slowing its evolution. Every (EVERY) Canadian could use their cellphone anywhere (ANYWHERE)in the country with present technologies. Private entities tell us they cannot do it, so we should ourselves. Government is not the enemy, it is the answer.

another nice bit of non-traditional infrastructure would be a government created secure operating system complete with an office suite, programming suite, media generating/editing and veiwing suite, freely available to all Canadians and required kit for all government agencies would be a PR coup and even save some money. The suite could even be sold internationally for a small fee. The economic malaise will die a death of a thousand cuts like this. I would also suggest an end to the privacy infringements advocated by non-governmental agencies. The tracking down of terrorists is one of only a few justifications to infringe on people’s privacy online or otherwise. While maintaining records is acceptable, the use of these records by private interests is not.

#33 Don, good points all. This government has bought its way into power by printing money through loosened fractional lending. The price of housing has not gone up at all, just the value of the dollars we’re throwing into the market. By devaluing currencies in a rapid race to the bottom, the respective “western” governments have been quietly rebalancing the renminbi/dollar exchange. What better way to pay entitlement programs than with inflated dollars. As Garth often points out, the fastest way to get poor is to keep your money in the bank and see its value erode daily. But don’t give up on the country. Flaherty and Harper may be selling us out to buy their way into the Bilderberg guest list, but the only way forward is to grit your teeth and find like-minded, patriotic Canadians to vote these latter day Quislings into the Mulroney holding tank. It will be a tough slog, but worth it in the end.

A National (NATIONAL) government can provide pensions much more efficiently than any private entitiy can. It is folly to believe otherwise. Or government is hamstrung by private intrests presently. These same private intrests quest for more and more profit to provide less and less service. A convoluted financial system composed of privatised gains and public losses is not easily justifiable, sustainable ora good bet for ones retirement. Government is the answer not the enemy.

Let me clarify. For Canada and Canadians. Few on earth have the advantages our country does. There is no reason for any Canadian to be living in duress. Yes we all must contribute but we do not have to be buried under a mountain of debt to be motivated to do so (it actually serves to demotivate).

A freely available cutting edge online learning system from Kindergarden to University complete with regional testing/interview centers would be another good idea. There is presently little reason for people to have to go into mountainous debt for even post secondary degrees. I am talking top flight faculty original learning material presented utilising techniques made available through ubiquitous computing and network power.

I am also thinkning that while democracy has been available to North American masses for some time a good education has not. People must better educate themselves (there is little reason not to with the advent of the internet but good information must be more freely available).

I would also like to hear some discussion of this idea. Let’s say you are half way through a 5 er at 3.79. Refinance at 3ish for 5 years from now but pay a few grand to break, or keep your few grand, invest it and hope rates don’t go up too much by 2015? You could always put that money straight on the mortgage then…..
Tough call….how high will interest rates be in 2015?

@ #10 Groovin 123 who said” REITs were a great trade in 2011, but every issue worth investing appears to be quite overbought at this stage in the game. ”

Agree, but I’m starting to bet ( a bit) that the rates will stay low longer than anyone here thinks and that Dividend plays are set to be the next bubble.

You just have to ask yourself what “stage” of the game are we in when dividends in the minds of most, including our host, are seen to be the least worst option? How many more will capitulate and walk away from their worthless GICs this year and next?

Words- like bubble bursting, soft landing, crash, market in the toilet, correction…
But yet, in contrast to those, I only see links, listings or quotes to houses or shacks being sold at ever rising rates. Or, at the very least, at asking price.
And the buying continues, at current or higher rates.
So, what gives?
Something is not jiving.
Common sense is telling me, (told me some time ago), that this Bull can’t possibly go on for ever.
Common sense does not seem to work on either side in the Canadian R.E. game.

Why all the venom? I thought you’d be proud of me since I receive no special benefit from taxpayer largesse nor do I suck from the teat of a generous public or private sector pension plan.

I should also mention I was laid off and denied credit dozens of times by the heartless members of the “silent” generation. You know… the ones we boomers are currently hurrying into their graves so we can claim their real estate.

I get tired of flack from cry-babies like you and DonDWest for the crime of being born in the middle of the last century. Practically all I have was built slowly and patiently over a very long time in spite of the grudging masters of the generation before me. It sounds like you might have to do the same.

54thBPOE, I assure you I am not Schiller. If I were, I’d be even more down on Dumbcouver. I am currently vacationing at my vacation home in Hualalai on the BIg Island in Hawaii until Februry 6th, so forgive me if I haven’t been more responsive to your ignorant lies. The weather hre is amazing, unlike anything that could ver be found in Canada.

Believe me when i say that nothing in Lichman BC compares to he sheer beauty, luxury, and service you find here. You wouldn’t know, though, because you have never left BC, and that is clear to all the readers. Let me assure you of this as well… There are about 50% of the Canadians here this year as opposed to last. Hmmmmmmm. Seems that times may be getting tougher for many BCers. In fact, my neighbors next door are from BC and they have shared an earful! Needless to say, this couple is in the “know,” and the recognize where Canadian values are heading. The ones that are here are mostly from BC and generally friendly, although they seem mesmerized this is actually a state within the United States and not a different country altogether. Talk about naievity. Funny. I spent the day with my Hawaiian agent, and he took me through a nice, newer area called Kukio. What was even more funny is he was showing me a property currently owned by a gentleman out of BC who is trying to offload his Hawaiian condo for $2.4MM. When he sells, he plans to purchase the vacant lot across the street, listed at $6.25MM, and build a custom home against the water.

The problem is he can’t afford to buy the lot right now because his home in North Van is officially upside down by about 25%, after agent fees and closing. So, he isn’t in a position to sell his North Van casa, and frankly he can’t afford to take the hit. My agent finds this guy to be completely out of touch with reality as he’s finding many Candian-owned properties on the Big Island are going into short sale situations or back to the banks in forelsures. So, clearly they couldn’t really afford it. The “equity” in Canadian real estate is drying up, and quickly. We had a god laugh… Not because of the hurt it brings people, but because of the pompous attitudes of neuvo riche that are now in for the reality check. This BCer really thinks he will buy this lot, but truth is it won’t happen. Why? He can’t sell him home in North Van without writing a check at closing, and he doesn’t have the liquidity to buy the oceanfront patch of green. So, basically the guy is a wannabe, trying to roll false equity to live the good life. By the way, the last Canadian buyer he has helped was over five months ago, and she was from Edmonton.

Anyway, the neighbors next door said they are “a little nervous” because “the [Vancouver and Richmond] markets have all but hit a brick wall.” Duh!!!!!!!! They’d love to move here permenantly and escape the rain, but they’d need the funds and inside jobs to make it happen. I was curious, so I inquired about their take on quality of life in Vancouver. Here was his response… “It’s bullshit,” he said, “If you love rain, forking over every paycheck for a shithole, and getting raked over the coals, then its a paradise!” His wife pulled he Kona Brewery beer to her mouth and smiled with a half smirk.

Mr.Turner
Maybe you should have a website which translates everything into Chinese. The Chinese realtors do not tell the Chinese buyers anything about the facts. (Only fairy tales about dragons) They never hear the facts and are always kept in the dark. Just like back home in China. (How the China government regulates the web and what not)

Recession? What recession? When it comes to ultra-luxury cars, there’s no such thing.

While sales of some large, gas-guzzling vehicles have levelled off due to high gas prices and the recent economic slowdown, high-end marques don’t feel the pinch like their lesser brethren. Anyone who can afford a vehicle costing more than $100,000 doesn’t worry about the price of gasoline spiking a few cents.

“Your theory about higher-end vehicle purchasers not being particularly influenced by the economy is bang on from a BMW perspective,” says Stephen McDonnell, director of sales for BMW Group Canada. “In the past couple of years, we’ve noticed that sales of our 6 Series and 7 Series models have risen significantly.

“In fact, in 2010, sales of those models increased 31% compared with 2009, and the 7 Series experienced its second-best retail performance year ever,” he adds.

“So far for 2011, sales of the same two models are going strong as well.

“M products, as you know, are the epitome of BMW performance and could certainly be classified as ‘want to have’ rather than ‘need to have’ vehicles,” Mr. McDonnell continues. “Last year [2010] was one of our best-ever years of M sales, with 785 M vehicles sold in Canada.

“This success represents an increase of more than 18% compared with the previous year. We see 2011 as being another strong year for M sales, particularly with the introduction of the all-new BMW 1 Series M Coupe … there is currently a waiting list for this product.”

JoAnne Caza, director of communications and public relations for Mercedes-Benz Canada, has a similar story to tell.

“In 2010, Mercedes-Benz Canada celebrated by far its best year ever and took the overall luxury leadership position in Canada,” she says.

Luxury marque Porsche is also reporting much higher sales for its high-end products.

“Porsche overall is up 46% this year in Canada, making it, by our calculation, the fastest-growing car brand in the country,” says Laurance Yap, manager of public relations at Porsche Cars Canada.

“Almost all of our cars are top tier by the average definition, with a transaction price of about $100,000 on average,” Mr. Yap adds. “May sales were up 60% and, amazingly enough, it wasn’t just the Cayenne — sports cars and the Panamera accounted for more than half of that number.

“If we look at 2010, just under 40% of all of the 911 models we sold were either Turbo or GT — GT3, GT3 RS, GT2 RS — models. We sold 65 GT3 RS alone. To put that number in context, Canada is generally about 2% of the world’s total sales; we were 8% of the world’s market for the GT3 RS.”

Exclusivity is also assured with the 2012 Audi R8 GT, as only 25 of those cars have been allotted for Canadian customers at a price of $228,000. All of the cars are already spoken for.

If a customer is looking for an even more expensive supercar, the 2012 McLaren MP4-12C will be sold by Pfaff Automotive Partners of Woodbridge, the sole dealership for McLaren Automotive in Canada, starting in October. The price? A mere $247,500

I just had to jump in again after reading some of these posts from a lot of you about how expensive and hopeless the real estate market is at present.

You guys talk as if Canada is made up of Vancouver, Calgary and Toronto. Canada is a much bigger place than that. If you want to live in a large metropolis then you have two choices, become indebted for the next five generations or rent. If you want to own a nice home with lots of land and privacy without a 60 year mortgage, then find a job in a midsize or smaller town and do it. Homes don’t cost the earth and the sky outside of the big bubble areas. The real estate market really is a local phenomenon.

This has been true of cities like Paris, Rome and Brussels for a very long time and Europeans are used to it and behave accordingly. It’s all about choices and you ALWAYS have choices.

Don’t waste your time yearning to have what the boomers have and eating yourself up in the process. Be different and find another way to have what you want.

I like to remind all illusionary “fools” who still believe that home prices will continue to escalate – and that mortgage rates will not increase for years to come, that they might be in for a devastating surprise. Depending on how long the Bank of Canada is willing to keep the overheated housing market and/or construction industry afloat, mortgage rates can double within months. In 1977 the going rate for a five-year mortgage was about 9%. In the summer of 1982 rates had climbed to above 18 percent. No one had foreseen nor predicted the substantial increase at that time neither.

Garth, you’ve posted this little tidbit numerous times – can I ask where it comes from? How was it determined?

I’m just guessing (no choice, since I haven’t seen a cite), but it seems like you saw somewhere that 40% of Canadians have a negative savings rate – meaning they’re drawing on their savings to meet their monthly bills – and interpreted that to mean 40% cannot pay their monthly bills.

But doesn’t every retired person have a “negative savings rate?” Don’t virtually all retirees typically draw their income from some combination of a pension, government benefits, and their own retirement savings? If they’re drawing down their retirement savings, would that be included in the count of people who are relying on savings to make their monthly bills?

If that’s the case, isn’t it very misleading to portray this as some sort of crisis situation, when in fact, it’s exactly how it’s supposed to work?

Or perhaps I’m way off base and your stat has nothing to do with retirees. Either way, I’d love the clarification.
You can start here: “38% have no savings… 30% do not have enough money to cover living expenses…” — Garth

Perk Disclosure described this way: ‘Based on the recommendation of an independent security review, the corporation has implemented certain security measures including security-related services for officers and directors. The value of any services provided for any incidental personal use is treated as a fringe benefit to the recipient.’

“Could anyone reading that tell that the charity had bought a $30 million Gulfstream jet that Reynolds uses as her personal taxi?

…”Despite its legal status as a nonprofit, the Reynolds Foundation does business as EduCap and refers to itself as a company. It pays like one, too. Reynolds makes a million dollars a year from the foundation even though it has assets of only about $200 million. Her salary is many times what the executives of charitable foundations of that size typically make.http://www.youtube.com/watch?v=4vF6UJb6A90
stephen burd watchdog tax status

Was the timing a coincidence? Or had the student loan giant’s leaders engaged in a deliberate scheme to mask the company’s true financial condition to make sure the deal — which promised to bring great riches to its board members, including chairman Al Lord, who was set to rake in $225 million — was consummated?

Some Economists have been predicting the collapse of the Canadian housing market for the last 3-4 years and in all of those years the market has almost doubled up in some places. So anyone timing the market is a fools game. I wish I had bought a house 4 years ago and even with a 10% -20% correction I would still have been way ahead.

” Leaving Canada for better life on 01.30.12 at 12:43 am
#33 you are bang on the truth. People with no money have bid up housing to affordable levels thanks to the evil anti Canadian CONs . One has to leaVe canada for a better life
”

My hats off to you Garth for calling these spin doctor real estate promoters of many kinds.. on their lies and ruthless pursuit of lambs waiting to be slaughtered. (house buyers today). The Government and Mr Carney are equally dispicable for their role in allowing the creation of the house of cards which will fall in the near enough future. (to try and avoid looking bad politically while in office). The sad thing is that the naive mortgage holders will be the main losers.

@ #105 Frank
Some Economists have been predicting the collapse of the Canadian housing market for the last 3-4 years and in all of those years the market has almost doubled up in some places. So anyone timing the market is a fools game. I wish I had bought a house 4 years ago and even with a 10% -20% correction I would still have been way ahead.
—————————————————–

You say that timing the market is a fools game but then lament you didn’t do it. Sure you could have done well, but it’s about risk, and you could have lost big too. You know how good an investment it was in hindsight only.

More and more companies are leaving Canada for cheaper wages US where workers can earn 50% less. Since Canadian houses cost double that of US houses more and more companies will leave Canada for a better and brighter future of bigger profits. Canadians can not afford wage cuts. Canada is going to suffer worse then the US.

Remember Jeff Goldblum’s character says in Jurassic Park – “Nature finds a way”. It’s how I feel about the politicians – They usually find a way to guard the debters (majority of population), since nobody wants a social upheaval.

These fixed rates are a prime example (no pun intended) Many of us expected the beginning of the end in 2012, via higher rates. But insanely low fixed rates caught us off-guard. The savers (minority) are on nobody’s agenda.

The cold laws of economics will eventually swing the pendulum, of course – but who knows if that will be 2yrs, 3yrs, 5yrs..?

“Silly me for wasting logic on the willfully ignorant.”
—————————————
You “suggest that we go with the most obvious conclusion” which denotes pure assumption, and
in no way, applies any form of logic, so save the
labels.

Started my Sun Run training for this year which takes me through some of the priciest real estate in Van West. Lots of sold signs on tear downs and brand new mcmansions. Still plenty of orange tape with heavy machinery on bare lots. No sign of slow down here. Will post updates as the training takes me through the spring season.

That video reminds me of a company called “Body by Vi” which uses a BMW to promote success and to generate sales, they even have a licence plate holder that says “I told you so” as if one day, THIS CAN BE YOU TOO!!. That Vi thing is a Scam stay away, but just funny how Re/MAX uses a similar tactic, lol..

There’s nothing natural in economics; it’s completely man made. The great libertarian/conservative fallacy is that there’s an almighty “free market God” in the background that brings everything into a “natural order of justice.”

I have news for you. The “free market” can and has been manipulated for thousands of years. If the powers that be want to keep Canadian real estate artifically high for a millenium, they certainly can. The motives behind keeping this market artifically high compared to the rest of the planet matters not; only the fact that they can indeed keep the game going if they so wish.

If housing does crash, make no mistake, “the market” didn’t save us. That would be the powers that be whom decided to finally let go of the reins.

At some point in the very near future, Harper or his successor puppet of whatever political stripe will send our young people to war…again. Whether it’s Iran, or Syria, Pakistan or even Taiwan/Korea, war is the penultimate precipice on which the economic system resets itself in the elite’s favour. Not only is it profitable, it serves to indoctrinate whole generations with fear and hopelessness, for there are no redeeming qualities no matter how many times they rename highways to honour those who “serve”.

But before this happens… again… please allow me to introduce you to the unknown internal executions committed by the allied forces upon their own soldiers, in the Fields of Flanders…

You exaggerate much?
Seattle gets the same rain as Vancouver.
My daughter lived In Hawaii for two years (university professor) and she couldn’t take it anymore. Out she went.
Did you know that Hawaii has a rainy season that last for months.
Now, let’s all watch the Republican debates and see how great America is. Educational and great eye openers.

Petronas, the Chinese-owned oil company and what is really happening in the Horn of Africa, a.k.a. what your nightly newscast will never touch upon unless there are available gruesome images of mothers crying or men flailing machetes…

Are we literally living in a housing bubble? And when it bursts, will it get as ugly as it did south of the border?

Macleans – 1 hour 34 minutes ago

A few days ago, Bank of Canada governor Mark Carney released another alarming, albeit muted, warning shot about the state of the Canadian real estate market. Some properties in Canada are “probably overvalued,” the central banker said during an interview with CTV. Last week Finance Minister Jim Flaherty hinted he is also worried about housing: “We watch the housing market carefully and we are prepared to intervene if necessary,” he said.

#110 canadian jobs goto US on 01.30.12 at 11:02 am
“More and more companies are leaving Canada for cheaper wages US where workers can earn 50% less. ”
———-
Big deal. The US still needs our commodities.
If we were smart we would produce more finished products from our commodities.

“Those who count on quote ‘Hollywood’ for support need to understand that this industry is watching very carefully who’s going to stand up for them when their job is at stake. Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake.”

This is what corruption looks like. What does Hollywood have to do with Internet censorship? Exactly what I have consistently bleated on this blog. It’s all about mind control.

“ The Government of your country ! I am the Government of your country, I and Lazarus. Do you suppose that you and half a dozen amateurs like you, sitting in a row in that foolish gabble shop, govern Undershaft and Lazarus ? No, my friend, you will do what pays us. You will make war when it suits us and keep peace when it doesn’t…. When I want anything to keep my dividends up, you will discover that my want is a national need. When other people want something to keep my dividends down, you will call out the police and military. And in return you shall have the support of my newspapers, and the delight of imagining that you are a great statesman.”
—UNDERSHAFT, the armament maker, in Bernard Shaw’s Major Barbara.

Theodoros Angelopoulos, film director, born 27 April 1935; died 24 January 2012, under suspicious circumstances on an empty road, crossing the street, by being hit by a motorcycle driven by a policeman, who sustained not a scratch. Angelopoulos at the age of 76, was working in Athens on his latest film, The Other Sea, a film that was to be about Greece’s financial crisis.

#105 – Frank – ”Some Economists have been predicting the collapse of the Canadian housing market for the last 3-4 years and in all of those years the market has almost doubled up in some places. So anyone timing the market is a fools game. I wish I had bought a house 4 years ago and even with a 10% -20% correction I would still have been way ahead.

So buy. Hurry! — Garth”

You probably wished you had gotten out of the stock market too, 4 years ago at this time. Just have patience, it will happen. At least with the stock market, a person has the ability to sell at the stroke of a key.

Not so with RE as my sister recently found out. They put their house up for sale, got an offer, and turned around and bought another place in a different city before the subjects were removed on their place. The deal fell through and now they are living apart, she in the new place, he in the old place, waiting for a buyer. And now spring is arriving and the markets will be flooded with listings. I wish them luck.

Don’t ya love it when people talk about Vancouver so glowingly – like in that post from AMERICAN, where a Vancouverite talks about the wonderful lifestyle here –

“I was curious, so I inquired about their take on quality of life in Vancouver. Here was his response… “It’s bullshit,” he said, “If you love rain, forking over every paycheck for a sh**hole, and getting raked over the coals, then its a paradise!” His wife pulled the Kona Brewery beer to her mouth and smiled with a half smirk.

Now that’s what I call a happy camper.

I was at a Birthday party last night, and it turned out to be a goodbye party too. 4 Couples of the 60 or so folks have decided they’re done. Two moving to Ottawa, one to Winnipeg and one to Switzerland (forensic accountant).

Garth, did you see the latest art. On Yahoo!!!! Even Yahoo got on it…. anyhow the author wrote:
“Most importantly, however, Canada’s pop won’t bring down the entire financial system, as it did in the U.S. That’s primarily because subprime mortgages are virtually non-existent in Canada, and government guarantees on mortgage insurance act as a buffer protecting the banking sector from housing market downturns. A whopping 75 per cent of mortgages in Canada are fully insured by Ottawa.”
A link is provided for those who are interested to read the art.:http://ca.finance.yahoo.com/news/what-happens-when-canada%E2%80%99s-housing-bubble-pops-.html

What other industry gets to suck this much out of every family without triggering anti-trust oversight? The agents, the mortgage brokers, the banks even, they live and die by taking their cut on every transaction. Nothing can stand in the way of the next transaction.

I believe during such times of war every 3rd politician in alphabetical order, whether in favour or not, should be forced to serve on the very front lines themselves. I am quite sure one of two things would happen; either there would be no war or each would be shot for desertion themselves.

If you lived in British Columbia where real estate fees are typically 7.0% on the first $100,000 and 3.0% on the balance of the sale price as opposed to the Ontario norm of 5.0% on the whole sale price, by my calculation, you would save $20,000 on the sale of your $1,200,000 home.

One of those Porsche GT3 RS were bought by Canadian race car driver in the Porsche Cup series. He lives in the GTA.

Many of the high end vehicles sold are in my neck of the woods…Vaughan Ontario

Many reasons for this, mostly because of the amount of developers and sub-trade owners who love here. During the warm months barely a day passes that you don’t see a Ferrari. Kids up here joke that you don’t have to go to the Auto Show, just stand on the corner of Hwy 7& Weston road on a Friday afternoon.

The rich have so much money now that most of their material desires are fulfilled. With all that leftover money, they speculate with a significant portion and inadvertently? create bubbles so they make more money. This is money they can afford to lose.

Net effect?

The working class will get much farther ahead by riding the tailcoats of these bubbles than by telling little Joey to go to school and get a good job. The gov is about to open the floodgates to foreign skilled trade workers. I hope you’re not telling your kids to become plumbers, carpenters, electricians, welders cause boy, are you in for a surprise.

Like I said, RIDE BUBBLES!!! Everything else will seem like a wasted effort.

#40 Uh Oh canada
We are witnessing the death of the middle class. Those who are rich are too wise to buy at such inflated prices. Those who are poor just can’t. The middle class will soon join the latter when reality hits. This is history in the making!

Well said, this seems so obvious to us as well, all the little bites, car insurance, smart meters, water meters, home insurance, ferry fares, gasoline, milk, alcohol, strata fees, bus passes. All the things we take for granted are edging up and the only ones that it doesn’t matter to are the 1%. I used to joke that I could afford to buy a Porsche but couldn’t afford to run it…That applies to a lot of small luxuries I have always had but realize the change is coming quicker now.

for Mike the Engineer with the dog that has weak legs….I don’t know if you’ve found someone in Mississauga yet but if you are stuck and can make the trip into the west end of Toronto Dr. Skutelsky is really great; pragmatic and knowledgable, and very reasonable. My dog passed away a number of years ago but was well cared for by him. very fair guy imho.

You don’t have a clue. Really! You do not have any idea about what your talking about.

Your generation have had it so easy its laughable.

Please do the younger gerneration a favour.

Be thankful for what you have; only as a result of when and where you were born. Don’t claim you have worked really hard through tough times to achieve what you have. Its arrogant, self righteous and is a weak arguement at best.

If your tough times include the housing boom/bust of the late seventies and early eighties and recessions and tech crash of the nineties. Then, perhaps you should redefine what you think tough times really are…basically the economic environment you were born into was an incubator for prosperity.

Those born into today’s economic environment are like lambs born in a lions den.

We young people don’t want pity or empathy, your probably void that emotional capacity anyway.

#136 A G Sage – “What other industry gets to suck this much out of every family without triggering anti-trust oversight?”

Well, let’s see now. How about the financial services industry. It’s RSP season time again, just wait for the pumping to start. Remember “Freedom 55″? Something that was invented by this group I believe back in the 80’s when mutual funds were the fad. Many of us boomers remember that don’t we? We all know how that worked out for many of those without company or government pension plans. Let the hype begin. Who will be first? BMO?

If you had borrowed and invested 100,000 at the end of ’08 in this stable wealth-producing business listed on the TSE (they dig money out of the ground), you would be sitting on a fat retirement right now…

I wonder… how many financial advisors did it take to screw in the light bulb that lit up negative returns in that time period?

Yep, I’ve been watching banks go short by selling all your mortgages and HELOC’s in the international market. Now you know why their 2011 “Impaired Loans” balances are declining—they’re selling bad debt just like Goldman Sachs and the rest.

is worth looking at. And then ask yourselves what the purpose of publishing that news might be. The substance of the article does not support the headline (“Housing market bubble denied by BMO”) in any way, especially if you consider the caveats at its end. Of course there is no chance that one of these “threats” will materialize in Canada! Oh yeaayyy!

UK Daily Mail has the story..Met office report.you can lift a finger to google I presume.Why would I make something like the climate not warming for a decade up?
SO much for carbon trading upon carbon derivative trading,the banksters will have to find another bubble to pump up.

He owns a 2 week time share. Like a typical American never travels to other Countries where the truth can be found. Fact is the American has a bad reputation that follows him like a shadow to any country he visits. Bottom line International investors flock to Vancouver and RICHmond not rainy drug ravaged Hawaii and that’s a FACT
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120 eaglebay – Parksville on 01.30.12 at 12:19 pm
#95 The American on 01.30.12 at 4:29 am

You exaggerate much?
Seattle gets the same rain as Vancouver.
My daughter lived In Hawaii for two years (university professor) and she couldn’t take it anymore. Out she went.
Did you know that Hawaii has a rainy season that last for months.
Now, let’s all watch the Republican debates and see how great America is. Educational and great eye openers.
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Business -bid-rigging and price-fixing scheme from at least January 2000 through February 2010.

Japanese auto parts makers fined $548 million (U.S.) for price fixing
Mon Jan 30 2012
Two Japanese auto suppliers have agreed to pay more than half a billion dollars in criminal fines for a price-fixing conspiracy in the sale of parts to U.S. automakers, the Justice Department announced Monday.

Philadelphia Inquirer
… alleges that Freddie Mac, the taxpayer-owned provider of mortgage money, … spent billions of dollars on securities called “inverse floaters,” which …
Since 1993, FINRA (formerly NASD) has published warnings that inverse floaters are
suitable only for sophisticated investors willing to take on high levels of risk. FINRA
has brought several actions dealing with CMOs and inverse floaters.

inverse floater
A derivative security that has a yield that is inversely related to interest rates. Inverse floaters are one part of a long-term bond. A portion of the bond’s current interest income is used to pay money market rates to holders of the regular floating-rate notes. The remainder of current interest and changes in the bond’s market value are earned by holders of the inverse floaters. Holders of this type of security can have major losses as a result of increases in interest rates. These securities are used primarily, although not always successfully, by professional portfolio managers

The Economist is an embarrasment. They have been touting real estate mayhem in Canada for a half decade. In my opinion they are pumpers for Shiller who was dead wrong on Vancouver. Even a broken clock is right twice. I can just see prices dropping 1% one quarter and the Economist, American and their ilk will be jumping up and down you see you see we told you. Then crumple as they watch the trajectory continue
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158 fancy_pants on 01.30.12 at 5:04 pm
The Economist figures the Canadian market is overvalued by over 70 per cent.

Bank of Montreal alleges huge mortgage fraud – Calgary – CBC Newswww.cbc.ca/news/canada/calgary/story/…/mortgage-fraud-bank.htmlYou +1’d this publicly. Undo
4 May 2010 – The Bank of Montreal is suing hundreds of people in Alberta, including … say the scam’s ringleaders would identify the worst house in a good …

Warren Buffett said: be fearful when others are greedy, and greedy when others are fearful. That rule applies to other assets as well as stocks. In overpriced markets, like Toronto where the bidding wars are still going on, it’s time to be fearful. In markets where the correction has occured, like many American cities or places in Canada like Windsor, Ontario it’s time to be greedy and look at buying if you want to be a home owner.

Mike the engineer, Kitchener vets we found to be half price for surgery compared to in the beaches, Toronto. I believe we went with Kingsway, but check around, we saved a couple thousand for a short drive, friendlier too.

Yazaki engaged in three separate conspiracies to rig bids and fix prices of automotive wire harnesses, instrument panel clusters and fuel senders.
DENSO engaged in conspiracies to rig bids and fix prices of electronic control units and heater control panels.
All of these parts are essential to the wiring, circuit boards, gauges and fuel tanks of automobiles.
The executives, who held various positions in Yazaki with responsibilities including managing sales to Honda and Toyota, participated in the wire harness conspiracy.

All of the conspirators carried out the conspiracies by agreeing during meetings and conversations to allocate the supply of the products on a model-by-model basis and to coordinate price adjustments requested by automobile manufacturers in the United States and elsewhere.

They sold the auto parts to manufacturers at non-competitive, rigged and fixed prices and monitored the prices to make sure those involved in the conspiracies adhered to the agreed upon bid-rigging and price-fixing schemes….

“Ana,” a single mother living in Florida who needed to work from home to care for her ailing daughter. She thought she had finally found a solution when she learned of an opportunity to own an ATM in a profitable, high-traffic location.

All that was required was an upfront investment fee.

Hopeful, Ana signed on and invested her life savings. But, the company never fulfilled its promise. It was only after Ana had lost everything and was left saddled with debt that she discovered that the salespeople provided phony references and lied about the profits that would be earned with their ATMs.

As it ruined the lives of folks like Ana, this company raked in over $4 million in profits.

I’ve heard heartbreaking stories like this one all over the country. That is why, as head of the Civil Division of the Department of Justice, I have worked hard to enhance our role in protecting consumers from these predators. Our hard work has paid off: a nationwide effort by the Department’s Office of Consumer Protection Litigation, the Federal Trade Commission and state attorneys general has resulted in the conviction of over 150 defendants – including the two individuals behind the ATM scam – as well as court orders of over $100 million in criminal restitution for victims like Ana.

Warren Buffett said: be fearful when others are greedy, and greedy when others are fearful. That rule applies to other assets as well as stocks. In overpriced markets, like Toronto where the bidding wars are still going on, it’s time to be fearful. In markets where the correction has occured, like many American cities or places in Canada like Windsor, Ontario it’s time to be greedy and look at buying if you want to be a home owner.

We have a long way to go before buying in USA is viable! Another 15-19% down on national avg folks. Windsor is never a good buy!

One has to wonder why CREA, CMHC or any government housing institution doesn’t report foreclosure stats.

I agree – and lawyers should report the cases they lose (so we would know who should not represent us), doctors should publicly report all malpractice suits, the church should report all deviant behaviour, politicians report all illegal activity, banks should clearly set out the terms and conditions (no fine print), auto workers pay back all the money we lent them, school teachers should leave us kids alone…..such injustice for the simple minded man.

Further, $570,000 for the land, add in purchase tax and closing costs – that’s $600,000.
Add in rezoning costs, time involved, fees to dump the existing residence, find and dispose of the buried oil tank and hidden asbestos, subdivision and registration of the 4 lot strata lots created, build the 4 units (each with a $250,000 land value component)…….
hey, this guy is making a few bucks here!
And to think that CMHC did not finance him a nickel so far.
But along come 4 buyers – each with 5% down.
And no-one discussed the morals of the story. Because there is more than one.

Jan. 17 (Bloomberg) — China’s urban population surpassed that of rural areas for the first time in the country’s history after three decades of economic development encouraged farmers to seek better living standards in towns and cities.

The world’s most-populous nation had 690.79 million people living in urban areas at the end of 2011, compared with 656.56 million in the countryside, the National Bureau of Statistics said today in Beijing. That puts the number of people residing in China’s towns and cities at double the total U.S. population.

China’s urbanization has accelerated since Deng Xiaoping introduced capitalist reforms in the late 1970s, lifting more than 200 million people out of poverty and transforming the nation into the world’s second-largest economy and its biggest consumer of steel, copper and coal. That migration may have decades more to run, diluting an agrarian economy that was once the ruling Communist Party’s power base.

“Urbanization has been a fundamental driver behind China’s economic growth,” said Chang Jian, an economist at Barclays Capital in Hong Kong who formerly worked for the Hong Kong Monetary Authority and the World Bank. “Urbanization in China still has a long way to go, maybe for another 20 years.”

China’s rural population fell as a proportion of the nation’s total to 50.05 percent in 2010 from 81 percent in 1979, as reform fueled a more than 90-fold increase in the economy during that time. During the first three decades of Communist Party rule, that proportion declined by less than 9 percentage points from 89.36 percent in 1949.

21st Century

Nobel economics laureate Joseph E. Stiglitz has cited urbanization in China, along with technology developments in the U.S., as the two most important issues that will shape the world’s development during the 21st century.

With more urbanization and industrialization ahead of it, China still needs investment to upgrade its industries and infrastructure, Ma Jiantang, commissioner of the National Bureau of Statistics, said today in a briefing in Beijing.

Income for the nation’s city dwellers is more than triple that of its rural residents. Per capita urban disposable income increased 8.4 percent in real terms last year to 21,810 yuan, according to the statistics bureau. By the same measure, per capita rural cash income increased 11.4 percent to 6,977 yuan, according to the agency.

The statistics bureau doesn’t provide disposable income statistics for rural residents because much of their annual earnings aren’t in cash, such as food they grow themselves.

Income growth for rural residents outpaced that for people in towns and cities in 2011 for a second consecutive year. Rural income grew faster in 2010 for the first time since 1997.

China’s rural poor have been the source of revolution throughout the nation’s history. Mao Zedong’s Communist Party took power in 1949 after winning the support of hundreds of millions of peasants living in the nation’s countryside. After the Communists’ victory, Mao redistributed land from rich landlords to penniless peasants.

As the nation’s urban population surges, China now faces the challenge of providing jobs, welfare and other social services to its city dwellers, Zheng Zhenzhen, a professor at the Institute of Population and Labor Economics at the Chinese Academy of Social Science, said by telephone today.

“One of the government’s top priorities now is to look after the lowest rungs of the urban population,” Zheng said.

The idea of rising rates is based on the assumption that there is a self-regulating mechanism that can bring economy back to normal if the rates are kept low long enough for that.
It is obvious now – that self – regulating concept doesn’t work anymore. The cycle theory is not applicable here. There was a resemble of the cycle at the time when Soviet Union collapsed and western world took advantage of the post soviet markets. Since then, the further stimulation of the economic growth has been provided on the base of bank credits. In order to survive, economy needs more and more borrowers. The government will be encouraging borrowers by all means. Low interest rates one of them. They will be kept low for uncertain time. There is simply no any other alternative within the existing monetary system… and the ruling elite doesn’t want to change anything… or cannot…

Garth is on Twitter now?! This is excellent news something I had inquiried about months ago. Let’s see how his message permeates through the Twittersphere and if it gets any traction. Also, it would be interesting to see how many Blog Dawgs are on Twitter and if we can match handles to Twitter accounts. If nothing else, it would be a good way to connect.

Reading all these post is funny, doom, resentment of the media, real estate agents, and the machine.

I would love to play poker against some of you. Most just fall in love with those pocket ace’s thinking they can’t lose, and when they do, sour grapes. Not many of you take into account environmental variables. Like the herd, how they think, what moves and motivates them. You just look at those ace’s (fundamentals) figuring a sure thing the market will tank. Ah grasshoppers. So much to learn

The guy that paid 570000 for that shack won a watch, 99.99% chance he is a builder, lot was 150 x 130, Easley put up 3 two story singles. Lets do the math. 40K to bulldoze. On the high side 180 per sq foot X 1500 * 3 + 570000 = about 880000. Lets kick in 120000 as un expected expenses and financing charges. 1, million cost for 3 homes.

So on the low side, he sells each unit for 600000 x 3= 1.8 Million or 800k Profit.
On the high side 750000* 3 = 2.25 Million or 1.25 Million.

I just read an article in McLeans stating something to the effect that there may well be a housing bubble but it will not lead to houseageddon. Sounds vaguely familiar but it got my two remaining nuerons passing signals back and forth for a momment or two. There were a number of reasons why our bubble is different and we can look forward to the mythic soft landing. As a buyer I wonder why anyone would buy when you can look forward to years and years of your house decreasing in value (aka soft landing). Maybe I am confused but I am thinking of not purchasing until the houses are really cheap or the bottom has passed. I am guessing rental gouging and repeated government interventions will continue to prop up the market all the way down (or as wages go all the way up). I wonder how this is different from socialism? Oh yeah, a few get rich in this scheme therefore it is capitalism.

Most of you on here are young, you wish for a crash not knowing that it will be the young that suffer the most, us old boomers have been around, we have lots of freinds in high places, you kids are just starting out.

If you got you wish it would not mater if a house went down to 50 bucks,

I have a lady friend, from Etobicoke, that swears by Dr. Skutelsky.
He is very kind, and I feel you can be honest and say money is tight and can you work out a payment plan.
I wish you the best for you and your beloved Pup.
Sorry for sidebar, Mr. Turner, but, Bandit wouldn’t mind, I am sure.

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#128 disciple — “. . . being hit by a motorcycle driven by a policeman, who sustained not a scratch.” — Isn’t that just so convenient? He ‘happened’ to be in the wrong place at the wrong time for the wrong reason.

Coincidence? No. They don’t exist!
*Roubini “Translation: ‘We can’t stop the coming crash, but we can make it look like it was Iran’s fault!’ — Official White Horse Souse. wrh.com; Good for the Court; Who is Running the US? Hint: Rothschild Bank of London – Rothschild Bank of Berlin – Warburg Bank of Hamburg – Warburg Bank of Amsterdam – Lazard Brothers of Paris – Israel Moses Seif Banks of Italy; Breakdown While attention is on Iran, the west’s system is broken. Iran is just a convenient FF to divert our attention away from the economy; Europe – US One and Europe and US Two;Chauffeur Nice to receive a US$1 mln. inheritance; US Steelworkers could walk Wed.

Economics Professor presents arguments in Occupy’s stance; Freddie Mac Conflict of interest? Twenty Signs Europe is headed into a depression.
*Ron Paul Love or hate him, he sure gets under people’s skin. Watergate Part Deux? 6:52 clip Reality check, or what to expect if / when the US attacks Iran, and Third Aircraft Carrier group coming to Iran; Monsanto EPA buckles again; HB2288 Deferred Bill tracks websites; Nigeria More US meddling; 6:25 clip Green light to WW3; CC -26 is climate change, non? A little mild for us, granted; 4:23 clip NDAA and its after-effects; DHS / TSA “Two lessons here. First, the practice of requiring potential DHS/TSA employees to flunk an IQ test to get hired needs to be scrapped. Second, they really ARE watching every one of your tweets!” wrh.com.

Glad Re/Max chose to highlight the moron in the pink suit three times in the promo clip. Just inspires confidence in our Canadian REALTOR “professionals”.
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I saw Barbara Beers wearing a nicely fitted pink suit once, looked good on her! Him? He ain’t no Barbara Beers!

The Canadian market is beyond a correction and will take many years to equalize with wages. What the headlines post is taken for what it is, an optimistic guess that prices will correct by 10% or less. That way when the market does correct, you’ll have the next batch of fools to jump in on a ‘great deal’, who will only sustain or modestly increase prices for a short time until the next downturn occurs afterwards—then repeat it all over again and so on.

This is the most optimistic view which excludes exogenous global shocks. If anything happens over in Europe, then we’ve got even more serious problem.

I still haven’t heard one viable premise from RE bulls explaining what will carry home prices for the next decade or even years. They all say low affordable rates yet US home prices continue to fall with record low rates. I’m waiting…

You can add Montreal, Victoria (collapsing fast but still not affordable by any means), Saskatoon, Winnipeg, Mississauga, Edmonton and recently Halifax to your list as well. The tentacles of the bubble spread beyond just Vancouver, Toronto and Calgary.

I wouldn’t call Calgary a metropolis. Canada truly only has three cities I would classify as a metropolis on a world scale. They’re Toronto, Montreal, and maybe (big maybe) Vancouver. I wouldn’t exactly call these high class International cities either. Comparing them in the same league as London, Paris, and Brussels is delusional.

What I’m getting at here is the young Canadian antelope is running out of places to settle in the vast Canadian landscape that’s filled with lions who have already staked their territory. Yes, we have a lot of land, but only so many urban centres.

You have to balance jobs along with real estate affordability. Let’s be honest with ourselves, rural Canada is only an option unless you’re retired. So what’s left? Thunder Bay? Fredericton? Moncton? Regina? Red Deer? Windsor? Sault St. Marie? Trois-Rivière?

Keep in mind this is coming from the perspective of a guy who has lived most of his life in Halifax. Anyone who has formally come from Halifax will tell you they took a huge hit in the job prestige department in order to live there. I can’t see much wiggle room to move any lower job wise; so I can set up camp in say Thunder Bay for example. The homes are not exactly affordable if the only job you can get is begging groceries.

Reminder, we’re in a service economy now, the manufacturing is gone. Small cities have, for the most part, lost their career worthy jobs unless you’re working for the government. And the sad reality is I would be lucky to get that job begging groceries in such cities. In Halifax young people are leaving in droves because they can’t find work. They often end up trapped in Toronto, Calgary or Vancouver just to get any work. I have the shiver at my chances of finding decent work in say Trois- Rivière; même ci je suis bilingue.

Historically, personal wages increased because workers demanded it from their employer, while today we see employers demanding cheaper wages from their employees. Our debt is so negatively extreme that is has reversed the entire workforce sentiment.

At #120. You prove my point precisely. Hawaii has 8 islands, nimrod. Some, like Kuai receive a ton of rain. Others, like The Big Island only receive 10″ a year along the Kohala Coast, which is where I am located. You never indicated where your daughter was located. Sounds like she was in Hilo. We aren’t talking about that. Re-read my post, then get back to me.

To 59thBPOE, I own 100% of my property on the Kohala Coast. It is not a time share. Of course, that’s where your mind would immediately go as you are a poser. Bought it in Hualali for *undisclosed amount* in 2011, and values had come down nearly 30% from their 2006 peaks in this community. Values have stabilized in this area. Along the Kohala Coast in general, values have come down 55% from peak on average. You can now buy nice property for about $400/sq. ft. Normal property for about $280-$300/sq. ft.

@Onemorething, post #174:
You say another 15 to 19% down for USA prices. That’s a typical example of capitulation, similar to what happens at a stock market bottom, which is when most people have given up and prices are the cheapest. Then again, if USA prices still can fall that much, imagine what could happen to Canada! As for Windsor, it is cheap now and represents better value than Toronto area by far, providing you have some source of income.

Sensitive Swiss bank data handed to US
The Swiss finance ministry has confirmed that encrypted data relating to Swiss banks’ clients in the United States has been transmitted to the US tax authorities.

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Lord Ashcroft: BBC on new tax haven scandal Treasure Islands
Jan 30 – On a BBC Panorama programme, “featuring the Turks and Caicos Islands, that financially unclean British Overseas Territory which was taken over by the British government a couple of years ago when the corruption spilled just too far out of control, it is a good in-depth investigation into an episode that raises uncomfortable questions about British parliamentary democracy.” Nick Shaxson speaks in the programme.
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.. he should be stripped of his pension!
Forfeiture committee advises Queen to strip former RBS chief executive of honour

http://www.tackletaxhavens.com/taxcast/
January
In our inaugural TaxCast, we discuss the implications of the Vodafone vs India landmark tax case, compare Bill Gates and Mitt Romney’s attitudes to taxation and visit the Occupy camp outside St Paul’s Cathedral in London

Garth’s Twitter Posts

The views expressed are those of the author, Garth Turner, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.